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boundary=80f32ea7958950f2953a05f7bc7472629e157b9f8548f31a00e407ff9536 Date: Mon, 25 Nov 2024 21:51:48 +0000 (UTC) From: Ryan Allis Mime-Version: 1.0 Message-ID: Subject: Making Paid Ads Profitable for SaaS Firms Reply-To: Ryan Allis x-list-id: 8a46fb20-5b78-45e0-ae38-2525b17867ca Feedback-ID: =?us-ascii?Q?12d46a9c-126c-4e03-8e68-3edd8287da5d=3Anewsletter=3A8a46fb20-5b78-?= =?us-ascii?Q?45e0-ae38-2525b17867ca=3Acfa52acda08d1fe?= sId: 8a46fb20-5b78-45e0-ae38-2525b17867ca x-list-owner: x-newsletter: https://saasrise.beehiiv.com/p/making-paid-ads-profitable-for-saas-firms x-beehiiv-ids: =?us-ascii?Q?{=22account=5Fname=22=3A=22https=3A=2F=2Fsaasrise=2Ebeehiiv=2Ecom=2F=22=2C=22campaign=5Fid=22=3A?= =?us-ascii?Q?=2212d46a9c-126c-4e03-8e68-3edd8287da5d=22=2C?= =?us-ascii?Q?=22category=22=3A=22newsletter=22=2C=22email=5Fgenerate?= =?us-ascii?Q?d=5Fat=22=3A1732571491=2C=22user=5Fid=22=3A=228a46fb20-5b?= =?us-ascii?Q?78-45e0-ae38-2525b17867ca=22}?= List-Unsubscribe: =?us-ascii?Q?=3Cmailto=3A8a46fb20-5b78-45e0-ae38-2525b17867ca+1d17dc26-c1df-44e?= =?us-ascii?Q?0-812a-883b6ad5b6bc+12d46a9c-126c-4e03-?= =?us-ascii?Q?8e68-3edd8287da5d=40unsub=2Ebeehiiv=2Ecom=3E=2C?= =?us-ascii?Q?_=3Chttps=3A=2F=2Fsaasrise=2Ebeehiiv=2Ecom=2Funsubscribe=2FeyJ0eXAiOiJKV1QiLCJh?= =?us-ascii?Q?bGciOiJIUzI1NiJ9=2EeyJzdWJzY3JpYmVyX2lkIj?= =?us-ascii?Q?oiMWQxN2RjMjYtYzFkZi00NGUwLTgxMmEtODgzY?= =?us-ascii?Q?jZhZDViNmJjIiwicG9zdF9pZCI6IjEyZDQ2YTlj?= =?us-ascii?Q?LTEyNmMtNGUwMy04ZTY4LTNlZGQ4Mjg3ZGE1ZCI?= =?us-ascii?Q?sImxhc3RfcmVzb3VyY2VfZ3VpZCI6IlBvc3Q6MT?= =?us-ascii?Q?JkNDZhOWMtMTI2Yy00ZTAzLThlNjgtM2VkZDgyO?= =?us-ascii?Q?DdkYTVkIn0=2EX3p2EeVO=5FFv8SYbMeOYnv1pVzsTL?= =?us-ascii?Q?zTnrpBY4W3bpYi4=3E?= x-newsletter-signup: https://saasrise.beehiiv.com/subscribe List-Unsubscribe-Post: List-Unsubscribe=One-Click x-newsletter-id: https://saasrise.beehiiv.com/ x-beehiiv-type: newsletter X-SG-EID: =?us-ascii?Q?u001=2Esr+Zi4HchtZiAIrGLItAkqAJLamgo33aet=2FuqlkyaJPf=2Fx4cfuqMKIwYl?= =?us-ascii?Q?dAofkCR68C2a3749fFAiIGPJkwLFYv9hLVl1mGt?= =?us-ascii?Q?X0sGSh=2Flm5OoqpEly9Yre=2FLyxutB8rouYh89DRv?= =?us-ascii?Q?6gVZyIqddwDfViC1y7kgT0IyN6Ooha5z20nVNTy?= =?us-ascii?Q?dGwLP6PR9vXTgp++HCVEXHS+UrOra4N7hg+ayAH?= =?us-ascii?Q?7rn1Ua9gFM7s0BVaq8NO0VfsvSZ1ltwormYGsle?= =?us-ascii?Q?kwyi?= X-SG-ID: =?us-ascii?Q?u001=2ESdBcvi+Evd=2FbQef8eZF3BpTL9BgbK5wfSJMJGMsmprAVgeiC8iaV7rEmQ?= =?us-ascii?Q?+cYi2k7yiorsTVoJVcfiNegnyTClvRYMoZ19BQD?= =?us-ascii?Q?qhXEbF=2F8yjpg=2F0okvdpxqg5QsG=2F+0p0dz2QT=2FZa?= =?us-ascii?Q?gR7vKBW35l8z7ShFJdISGg4gZiAkjqdymBqsiki?= =?us-ascii?Q?C6Ad3ETxODEENQ2LJYc6LW1nNVdoOHOtGjsvM8v?= =?us-ascii?Q?=2Fpv6YiMKBcIF9kOu2hPse1IybqRov7H7U4Xzy0B?= =?us-ascii?Q?i81gr8Mol7esU5Dr4fGiWJUtfg=3D=3D?= To: "andrew@sterlingcal.com" X-Entity-ID: u001.sWV69YT6CipfOgvvxr5vQg== X-Spam-Status: No, score=-3.3 X-Spam-Score: -32 X-Spam-Bar: --- X-Spam-Flag: NO --80f32ea7958950f2953a05f7bc7472629e157b9f8548f31a00e407ff9536 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=utf-8 Mime-Version: 1.0 View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/c8d34c01-cd64-4= edc-a7df-0de0ea4a87f3/community_header-01.png?t=3D1708914966) Follow image link: (https://www.saasrise.com) Caption:=20 Today we have a brand new [article](#article), [Loom video](https://www.loo= m.com/share/6af9c099f75a4ad3b05ab546396681cb), and [slides on making ads pr= ofitable](https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJA1p5_BVpfb= CofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_3_731) for your company.=20 Feel free to pass this along to your agency or Head of Growth/Marketing. Yes, getting ads profitable and scaled is the holy grail for SaaS growth=E2= =80=A6 (in addition to product + outbound). The main difference between a $3M ARR SaaS firm and a $30M ARR SaaS firm is= whether you get paid advertising to work profitably (with a fast enough pa= yback window). Once you=E2=80=99ve reached product-market-fit and have a product that cust= omers are getting value out of and love =E2=80=94 it=E2=80=99s time to star= t advertising and finding the channels that can scale up customer acquisiti= on. Below we provide an in-depth guide to setting up paid search ads, retargeti= ng ads, matched audience ads, lookalike ads, boosted post ads, and review s= ite ads.=20 If you enjoy killer content like this, [apply to join the SaasRise communit= y](https://saasrise.com/). We welcome all CEOs/Founders with $1M-$100M in A= RR. We offer a two-week free trial. Apply to Join SaasRise Here =F0=9F=94=A5 (https://www.saasrise.com) Video: Paid Ads Setup & Tracking =F0=9F=8E=A5 (https://www.loom.com/share/= 6af9c099f75a4ad3b05ab546396681cb) Now let=E2=80=99s jump in to the [video](https://www.loom.com/share/6af9c09= 9f75a4ad3b05ab546396681cb) and the long-form [article](#article) based on w= hat I learned as CEO/Co-founder of iContact and helping rapidly growing Saa= S firms like Instantly, Tatango, Clearstream, Seamless, and many others.=20 ## **Video: Ads 101: Setup & Tracking** Here=E2=80=99s this week=E2=80=99s free [video on how to set up your paid a= ds](https://www.loom.com/share/6af9c099f75a4ad3b05ab546396681cb)=E2=80=A6 f= eel free to pass it along to your Head of Growth / Marketing. View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/08f99bc0-9319-4= b4b-9d55-24b09c69e277/Screenshot_2024-11-25_at_2.22.08_PM.png?t=3D173256613= 7) Follow image link: (https://www.loom.com/share/6af9c099f75a4ad3b05ab5463966= 81cb) Caption: A free 34 minute video on how to set up your ad campaigns =E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2= =80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80= =94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94= =E2=80=94=E2=80=94 # This Week=E2=80=99s Growth Article:=20 Making Paid Ads Profitable by Ryan Allis View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/3cc78cb3-70cd-4= 930-aaa1-0ab9eac33b59/Screenshot_2024-11-25_at_3.43.58_PM.png?t=3D173257105= 7) Caption:=20 =E2=80=9C**About the Author: **Ryan Allis is the founder of _[SaasRise](htt= ps://saasrise.com/)_, the community for experienced SaaS CEOs & founders wi= th $1M-$100M in ARR. Ryan founded and grew iContact as CEO from $0 to $50M = ARR, sold it for $169M, and then earned his MBA from Harvard Business Schoo= l. Today, Ryan coaches SaaS CEOs in rapidly scaling up revenue, building th= eir teams, and preparing for and executing on $100M+ exits. If you are a CE= O/Founder looking for guidance scaling up revenue and preparing for a succe= ssful exit _[apply to join the SaasRise community here](https://saasrise.co= m/)_. If you want help with your paid ads, we have _[an ads agency for B2B = SaaS firms](https://www.saasrise.com/ad-agency)_ and you can hire us to bui= ld out our B2B SaaS Growth system for you across Google, Meta, LinkedIn, Ad= roll, Bing, and Outbound.=E2=80=9C =E2=80=94=20 ## **Step One: Determine What a Customer is Worth** Yes SEO is helpful, outbound is critical (for B2B), tradeshows are wonderfu= l, and affiliates are key. But nothing has the scale of paid advertising do= ne right. But before you turn on your ads, you need to understand what an average lea= d and average customer is worth to you. Once you know your Monthly Average Revenue Per Account (ARPA) and Lifetime = Value (LTV) you can determine your Target Customer Acquisition Cost (CAC).=20 Your Target CAC should be about 6 months of ARPA (aka 50% of ACV) or around= 1/6th of your LTV. Find a good midpoint around those two numbers and make = it clear to your team that your goal is to acquire incremental new customer= s for that number or less. If you need help estimating your LTV, [see our slides on unit economics](ht= tps://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJA1p5_BVpfbCofB2easMkhw= I5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) or our [free video on calculatin= g CAC and LTV](https://www.loom.com/share/4bfc1035a80e4adf91a7f2c8214098a2)= . Once you=E2=80=99ve estimated your Target CAC and your Target CPL, it=E2=80= =99s time to start marketing via paid advertising. * Target CAC - How much you=E2=80=99re willing to spend in S&M costs to get= an incremental new customer * Target CPL - How much you=E2=80=99re willing to spend in S&M costs to get= an incremental new lead Ultimately your Target CPL should just be your Target CAC multiplied by you= r lead to customer conversion rate. If you can generate customers for <6 months of ARPA (or <1/6th of LTV), you= can rapidly scale your recurring revenue firm.=C2=A0 =E2=80=9CThe main difference between a $3M ARR SaaS firm and a $30M ARR Saa= S firm is whether you get paid advertising to work profitably (with a fast = enough payback window).=E2=80=9C =E2=80=94 - Ryan Allis, CEO of [SaasRise](= https://saasrise.com/), the community for SaaS CEOs& Founders=20 ## **Step Two: Select Your Ad Tracking Platform** Once you know your Target CAC and Target CPL, it=E2=80=99s now time to set = up an ad tracking platform.=20 Install your tracking pixels for each platform and set up your custom conve= rsions, then decide if you want to use a third party tracking tool for more= accurate tracking. You can use the existing ad managers or use a more accurate third-party tra= cking tool like Cometly, Hyros, or HockeyStack.=20 The issue with using the ad manager tracking alone is that they will often = double count conversions. If you show retargeting ads on Google and Meta an= d LinkedIn for example, all three platforms will often take credit for the = same conversion.=20 Tools like Cometly will dedupe these conversions, assign proper credit to t= he right sources based on your attribution settings, and feed back live con= version data via API to the ad networks =E2=80=94 making the ad network tar= geting more accurate. We like to use [Cometly](https://www.cometly.com/get-started?fpr=3Dsaasrise= )=E2=80=A6 here is a screenshot of our actual SaasRise Cometly dashboard, s= howing the results for our monthly ad spend across Meta, Google, Linkedin, = Adroll, and Bing in real time. View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/dea22a12-c035-4= 5d1-93f6-2a0137d35b11/Screenshot_2024-11-25_at_2.51.39_PM.png?t=3D173256790= 5) Caption: Our Cometly Dashboard ## **Step Three: Start Your Ads Test** Once you=E2=80=99ve got your tracking system in place, then turn on your ad= s with an initial test budget=E2=80=A6 just enough to get a Cost Per Lead (= CPL) per channel and ad type. Test the following=E2=80=A6 1. Retargeting ads - Meta, LinkedIn, Google Display, Adroll 2. Paid Search Ads - Google, Bing 3. Matched audience ads - Meta, LinkedIn, Google Display, Adroll 4. Lookalike/Predictive ads - Meta, LinkedIn, Google Display 5. Boosted post ads - LinkedIn (impressions goal within matched audience) 6. Review site ads - G2, Capterra, SoftwareAdvice, GetApp [Put in your weekly ad results into a spreadsheet like this](https://docs.g= oogle.com/spreadsheets/d/1jxyr6CcbZTYV5QOjNhnmaMBXD5X_V3vxzaC7Ce2c2gE/copy)= (make a copy) and start increasing your budget in the channels that are gi= ving CPLs under your Target CPL. Increase your budgets slowly around 10-15%= per week.=20 If you=E2=80=99re getting junk leads, check your geographic targeting to en= sure only your target countries are selected and make sure all the expansio= n options (Advantage+, Performance Max, etc.) are turned off.=20 Here are the various types of ad creatives you should utilize. 1. Testimonial Ads 2. Product Feature Ads 3. Case Study Ads 4. Founder Video Ads 5. Blog Post Ads 6. Free Trial / Demo Ads You may want to subscribe to a Design-as-a-service platform like Design Pic= kle or Superside to get continual new ad creatives uploaded each month, lea= ving the best performers and replacing poor performers with new creatives m= onthly.=20 You can use [this template to determine your test budget.](https://docs.goo= gle.com/spreadsheets/d/1gt2j0Rg43oNM6k4ySPBllQJktBa3aRcVqSR3YWcIZcA/copy) View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/74b8b9fb-87d1-4= 044-984a-b85402339336/Screenshot_2024-11-25_at_3.30.00_PM.png?t=3D173257020= 5) Caption: See slide ## **Step Four: Conversion Rate Optimize!** **Conversion Rate Optimization** is the practice of optimizing each of the = steps in the funnel by a little bit each month, in order to achieve a big o= verall reduction in customer acquisition cost =E2=80=93 allowing you to the= n spend more, win ad auctions, and create a virtuous cycle of growth and ma= rket dominance.=C2=A0 You=E2=80=99ll want to optimize each of the three major parts of your funne= l=E2=80=A6 1. Ad CTR (optimize ads and audience targeting) 2. Visitor to Lead Conversion (optimize landing page 3. Lead to Customer Conversion (optimize sales process) Small tweaks to each stage can make big differences! View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/caa7014b-b8d6-4= a5b-bcb5-c7f0851ef309/Screenshot_2024-11-25_at_3.09.50_PM.png?t=3D173256899= 5) Follow image link: (https://docs.google.com/presentation/d/1xjOKFXV7QnS7I_y= Ssj8TnSsoIErst2iykHbq6swoPzo/edit#slide=3Did.g3148ec25fa7_141_2899) Caption: See this slide View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/0f5526e1-eb46-4= ebc-aa68-ae6fff257216/Screenshot_2024-11-25_at_3.09.38_PM.png?t=3D173256898= 5) Follow image link: (https://docs.google.com/presentation/d/1xjOKFXV7QnS7I_y= Ssj8TnSsoIErst2iykHbq6swoPzo/edit#slide=3Did.g3148ec25fa7_141_2882) Caption: See this slide For optimal results, be sure to send your traffic to a landing page (no nav= / one CTA button) not your home page. You can create a landing page in Unb= ounce or ClickFunnels =E2=80=94 or just replicate your current home page wi= th no top navigation and a clear headline, subheadline, and big Call-to-Act= ion (CTA) button. View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/3e68c41b-fbae-4= 690-b21f-8925e3a5648f/Screenshot_2024-11-25_at_3.12.11_PM.png?t=3D173256913= 7) Follow image link: (https://docs.google.com/presentation/d/1xjOKFXV7QnS7I_y= Ssj8TnSsoIErst2iykHbq6swoPzo/edit#slide=3Did.g318c107d12c_0_44) Caption: Example from Clearstream You can [review our slides on conversion rate optimization here](https://do= cs.google.com/presentation/d/1xjOKFXV7QnS7I_ySsj8TnSsoIErst2iykHbq6swoPzo/e= dit#slide=3Did.g3148ec25fa7_141_2315) and also watch our [Loom video on CRO= ](https://www.loom.com/share/3e7ad20592aa433b9c11000c12c57845). ## **Step Five: Scale Up The Channels That Works** Once you=E2=80=99ve completed 2-3 months of optimization on your audience t= argeting, ad creatives, offer, landing pages, marketing automation sequence= s, and sales process =E2=80=94 and know your CAC per channel =E2=80=94 star= t scaling up ad spend on the channels that are producing the best results. You can [use a spreadsheet like these to assess your results by channel](ht= tps://docs.google.com/spreadsheets/d/1gS8L0R2c4h3koG6V8YWNIbzIFbFfSRkXxQ_Aj= VaCNKU/copy). View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/9fc4fe0c-25bd-4= 3a2-8f5d-767fd5bd47cf/Screenshot_2024-11-25_at_3.19.14_PM.png?t=3D173256956= 0) Caption: See our Channel Scaling Template If it doesn=E2=80=99t work right away, keep at it. Getting ads to work prof= itable is the holy grail and the main difference between a SaaS firm with $= 3M in ARR vs. $30M in ARR. If you want help with your paid ads, we have **[an ads agency for B2B SaaS = firms and you can hire us](https://www.saasrise.com/ad-agency)****. **[Lear= n more here](https://www.saasrise.com/ad-agency). ## **Key Slides** Here are some the most important slides from the video=E2=80=A6 View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/31ca4410-2345-4= 4d7-a3f7-3da4358a35b1/image.png?t=3D1732566391) Caption: See slide deck View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/73a1242d-ae45-4= d07-9fa8-44e77f3a43b9/image.png?t=3D1732569786) Caption: See slide deck View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/45813fb8-9553-4= d36-9426-1d706538649b/image.png?t=3D1732569794) Caption: See slide deck View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/40aca4a0-0f73-4= f97-9af6-8d7711adb899/image.png?t=3D1732569801) Caption: See slide deck View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/8ac5d2f0-3c4c-4= c44-a6d0-4b1594fa2ebe/image.png?t=3D1732569806) Caption: See slide deck View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/36d7d8cf-e284-4= 7aa-b40e-8ecc01743a92/image.png?t=3D1732569886) Caption: See slide deck View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/a7a48b59-cb6d-4= c0b-a29b-bc41b2d54a0f/image.png?t=3D1732569904) Caption: See slide deck =E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2= =80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80= =94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94= =E2=80=94=E2=80=94 ## **Join Our Community of SaaS CEOs & Founders** Thanks for reading. We hope this guide has been helpful to you. Please take= a moment to learn more about [SaasRise](https://saasrise.com/), our commun= ity for SaaS CEOs and Founders. We welcome all CEOs and Founders with $1M-$= 100M in ARR to join us. We hold three masterminds each week for our members= and provide an in-depth library of SaaS growth, fundraising, and exit reso= urces. You can [apply here](https://www.saasrise.com/). View image: (https://lh7-us.googleusercontent.com/hfBs593YmI4BmWtDAy-IYLfUy= zxsIZtkXekvhMxE6scbeaw3ols42QrNCpn0QBmwa5wAjDC_JrJiDJVB9XomoREPGh1MbycbrrYC= wFLQIpZsQ8yVSDEFSo4kypr8or0iCFJBG9_umJx5QX6vufzCXSM) Caption: We=E2=80=99re now up to 397 members in SaasRise, representing over= $2.5B in ARR Apply to Join SaasRise Here =F0=9F=94=A5 (https://saasrise.com/) =E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2= =80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80= =94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94=E2=80=94= =E2=80=94=E2=80=94 Thanks for reading! If you liked this article, join the SaasRise community = at [www.saasrise.com](http://www.saasrise.com) for even more helpful growth= content and weekly SaaS CEO masterminds.=20 ### _**About The Author**_ View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/95ce4977-1eff-4= 123-99fd-29b7974424a0/Ryan_Allis_Headshot_.jpg) Caption:=20 =E2=80=9C_Ryan Allis is the founder of _[SaasRise](https://www.saasrise.com= )_, the mastermind community for growth-focused SaaS CEOs with $1M-$100M in= ARR. He is a three time INC 500 CEO. He was previously CEO of iContact and= grew the firm as founder/CEO to 70,000 customers, 1 million users, 300 emp= loyees, $50M per year in sales, and an exit for $169M to Vocus (NASDAQ:VOCS= ). _ _Since the sale of iContact, Ryan has been the CEO coach to high-growth Saa= S firms including Instantly, Tatango, Seamless.ai, Pipeline, Datalyse, Gree= n Packet, Revenue Accelerator, Galleon, Clearstream, YouCanBookMe, Retreave= r, and EventMobi. Ryan has been part of the EO and Summit Series communitie= s._ _He holds an MBA from Harvard Business School, where he was Co-President of= the Social Enterprise Club and a member of the Harvard Graduate School Lea= dership Institute. He=E2=80=99s passionate about helping recurring revenue = software companies grow and exit._=E2=80=9C =E2=80=94=20 _We=E2=80=99ll see you next time with more great SaaS growth and scaling co= ntent!_ =E2=80=94=E2=80=94=E2=80=94 You are reading a plain text version of this post. For the best experience,= copy and paste this link in your browser to view the post online: https://saasrise.beehiiv.com/p/making-paid-ads-profitable-for-saas-firms --80f32ea7958950f2953a05f7bc7472629e157b9f8548f31a00e407ff9536 Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset=utf-8 Mime-Version: 1.0 Making Paid Ads Profitable for SaaS Firms
How to make paid ads profitable with a payback period of <6 m= onths or <1/6th of LTV - including how to track, optimize, and scale up = customer acquisition from paid  ‌ ‌ ‌ = ;‌ ‌ ‌ ‌ ‌ ‌&#= 160;‌ ‌ ‌ ‌ ‌ ‌= ; ‌ ‌ ‌ ‌ ‌ = 204; ‌ ‌ ‌ ‌ ‌ = ‌ ‌ ‌ ‌ ‌ ‌= 60;‌ ‌ ‌ ‌ ‌ ‌=  ‌ ‌ ‌ ‌ ‌ R= 04; ‌ ‌ ‌ ‌ ‌ &= #8204; ‌ ‌ ‌ ‌ ‌= 0;‌ ‌ ‌ ‌ ‌ ‌&= #160;‌ ‌ ‌ ‌ ‌ ̴= 4; ‌ ‌ ‌ ‌ ‌ &#= 8204; ‌ ‌ ‌ ‌ ‌ = ;‌ ‌ ‌ ‌ ‌ ‌&#= 160;‌ ‌ ‌ ‌ ‌ ‌= ; ‌ ‌ ‌ ‌ ‌ = 204; ‌ ‌ ‌ ‌ ‌ = ‌ ‌ ‌ ‌ ‌ ‌= 60;‌ ‌ ‌ ‌ ‌ ‌=  ‌ ‌ ‌ ‌ ‌ R= 04; ‌ ‌ ‌ ‌ ‌ &= #8204; ‌ ‌ ‌ ‌ ‌= 0;‌ ‌ ‌ ‌ ‌ ‌&= #160;‌ ‌ ‌ ‌ ‌ ̴= 4; ‌ ‌ ‌ ‌ ‌ &#= 8204; ‌ ‌ ‌ ‌ ‌ = ;‌ ‌ ‌ ‌ ‌ ‌&#= 160;‌ ‌ ‌ ‌ ‌ ‌= ; ‌ ‌ ‌ ‌ ‌ = 204; ‌ ‌ ‌ ‌ ‌ = ‌ ‌ ‌ ‌ ‌ ‌= 60;‌ ‌ ‌ ‌ ‌ ‌=  ‌ ‌ ‌ ‌ ‌ R= 04; ‌ ‌ ‌ ‌ ‌ &= #8204;
= <= /tr>=

November 25, 2024   |   Read Online

Making Paid Ads Profitable for SaaS Firms

How to make your paid ads profitable with a payback period of <6 month= s or <1/6th of LTV - including how to track, optimize, and scale up cust= omer acquisition from paid

3D""
=
3D""<= /td>

Today we have a brand new article, <= a class=3D"link" href=3D"https://link.mail.beehiiv.com/ss/c/u001.d1Y1-FGtvk= ksf5D-7I1gfS1SDeCyDof3Yvimn_Sl1zGLYf4ocG0OmqcYK2J-Fe1ts_hOxtuBQ2EiAOtJVMRJS= TAHNBcFfqVBC1QEcPzFneJ9udcV25v-ktjfpxdj7WcRf8Ww37_k-_JtFoMXR8MaXM0Dbqg-QroO= SnbQYqeIvZBtowAU5Av53apuCS735jvf76YGCECI6QbME74GmuUkFa_XUKQYVt9Ut6zQmO2Nf3y= H-3lT1wD6mos6WUjAA8GXD0I3r51agpa6p74tPZ09b5ozrcxuwGgzGPDKWCcFGjw/4br/60uMa7= WRTqa-QgH0WrmO_g/h2/h001.YuQ3O9CDjAx0gDMLyk61IrQ5crfVzOR3p8n8Qxiqi18" targe= t=3D"_blank" rel=3D"noopener noreferrer nofollow">Loom video, and = slides on making ads profitable for your company.

Feel free to pass this al= ong to your agency or Head of Growth/Marketing.

Yes, getting ads profitable and scaled= is the holy grail for SaaS growth=E2=80=A6 (in addition to product + outbo= und).

The m= ain difference between a $3M ARR SaaS firm and a $30M ARR SaaS firm is whet= her you get paid advertising to work profitably (with a fast enough payback= window).

O= nce you=E2=80=99ve reached product-market-fit and have a product that custo= mers are getting value out of and love =E2=80=94 it=E2=80=99s time to start= advertising and finding the channels that can scale up customer acquisitio= n.

Below we= provide an in-depth guide to setting up paid search ads, retargeting ads, = matched audience ads, lookalike ads, boosted post ads, and review site ads.=

If you enj= oy killer content like this, apply to join the SaasRise commu= nity. We welcome all CEOs/Founders with $1M-$100M in ARR. We off= er a two-week free trial.

Thanks for reading. We hope thi= s guide has been helpful to you. Please take a moment to learn more about <= a class=3D"link" href=3D"https://link.mail.beehiiv.com/ss/c/u001.UXwWVAixgZ= -oyJn_0myWAb-AJ0Mu__w4425SAq3JxfAdg2rLip74na7V4zcI1CkkJWIfWT5aFX5_Fx7fXo8ej= lCd6r85AumOZ-XJue940kXm-L8lf7EofgroUvKFoINNdSevwG0JnPWO9SMgz6Cd836RCJ3HJMzI= ZeRKWC5njgTgsE8pH2NUyFNY1laDr2ybmAW1r3jE7x1Ax8ixfQbQZyhUJPtkwZQHS40W0myY0yS= zdjWyfF8YNahmP6k4DLQc/4br/60uMa7WRTqa-QgH0WrmO_g/h40/h001.yTwAynC1xvseL6Yzv= kc7wdI7qeqFz5XIxCheeDOCf_8" target=3D"_blank" rel=3D"noopener noreferrer no= follow">SaasRise, our community for SaaS CEOs and Founders= . We welcome all CEOs and Founders with $1M-$100M in ARR to join us. We hol= d three masterminds each week for our members and provide an in-depth libra= ry of SaaS growth, fundraising, and exit resources. You can = apply here.

=
Apply to Join SaasRise Here =F0=9F=94=A5
Video: Paid Ads Setup & Tracking =F0=9F=8E= =A5

Now let=E2=80=99s jump in to the video and the long-form article based on what I learned as CEO/Co-founder of= iContact and helping rapidly growing SaaS firms like Instantly, Tatango, C= learstream, Seamless, and many others.

Video: Ads 101: Setup & Tracking=

Here= =E2=80=99s this week=E2=80=99s free video on how to set up your paid ads=E2=80=A6 = feel free to pass it along to your Head of Growth / Marketing.

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A free 34 minute video on how to set up your ad campaigns

 

This Week=E2=80=99s Growth Artic= le:
Making Paid Ads Profitable by Ryan Allis

3D""
<= tr>=

About the Aut= hor: Ryan Allis is the founder of SaasRise, the community for experienced SaaS CEOs & founders with $1= M-$100M in ARR. Ryan founded and grew iContact as CEO from $0 to $50M ARR, = sold it for $169M, and then earned his MBA from Harvard Business School. To= day, Ryan coaches SaaS CEOs in rapidly scaling up revenue, building their t= eams, and preparing for and executing on $100M+ exits. If you are a CEO/Fou= nder looking for guidance scaling up revenue and preparing for a successful= exit apply to join the SaasRise community here. If you want help with your paid ads, we have an ads agency for= B2B SaaS firms and you can hire us to build out our B2B SaaS Growth system for you ac= ross Google, Meta, LinkedIn, Adroll, Bing, and Outbound.

Step One: Determine What a Customer is Worth<= /b>

Yes SEO= is helpful, outbound is critical (for B2B), tradeshows are wonderful, and = affiliates are key. But nothing has the scale of paid advertising done righ= t.

But befo= re you turn on your ads, you need to understand what an average lead and av= erage customer is worth to you.

Once you know your Monthly Average Revenue Per Account= (ARPA) and Lifetime Value (LTV) you can determine your Target Customer Acq= uisition Cost (CAC).

Your Target CAC should be about 6 months of ARPA (aka 50% of ACV)= or around 1/6th of your LTV. Find a good midpoint around those two numbers= and make it clear to your team that your goal is to acquire incremental ne= w customers for that number or less.

If you need help estimating your LTV, see our slides on = unit economics or our free video on calculating CAC and LTV.

Once you=E2=80=99ve = estimated your Target CAC and your Target CPL, it=E2=80=99s time to start m= arketing via paid advertising.

  • Target CAC - How much you=E2=80=99re willing to spend in S&M costs to g= et an incremental new customer

  • Target CPL - Ho= w much you=E2=80=99re willing to spend in S&M costs to get an incremental n= ew lead

Ultimately your Target CPL should just be your Target CAC mu= ltiplied by your lead to customer conversion rate.

If you can generate customers for &= lt;6 months of ARPA (or <1/6th of LTV), you can rapidly scale your recur= ring revenue firm.=C2=A0

Tools like Cometly will dedupe t= hese conversions, assign proper credit to the right sources based on your a= ttribution settings, and feed back live conversion data via API to the ad n= etworks =E2=80=94 making the ad network targeting more accurate.

<= /tr><= tr><= td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;wo= rd-break:break-word;">

Here are the various types of = ad creatives you should utilize.

= <= tr>=

For optimal results, be sure to= send your traffic to a landing page (no nav / one CTA button) not your hom= e page. You can create a landing page in Unbounce or ClickFunnels =E2=80=94= or just replicate your current home page with no top navigation and a clea= r headline, subheadline, and big Call-to-Action (CTA) button.

=E2=9D=9D
 

The = main difference between a $3M ARR SaaS firm and a $30M ARR SaaS firm is whe= ther you get paid advertising to work profitably (with a fast enough paybac= k window).

 
- Ryan Allis, CEO of SaasRise<= /a>, the community for SaaS CEOs& Founders

Step Two: Select Your Ad Tracking Platform

Once you know your Target CA= C and Target CPL, it=E2=80=99s now time to set up an ad tracking platform. =

Install you= r tracking pixels for each platform and set up your custom conversions, the= n decide if you want to use a third party tracking tool for more accurate t= racking.

Yo= u can use the existing ad managers or use a more accurate third-party track= ing tool like Cometly, Hyros, or HockeyStack.

The issue with using the ad manager tr= acking alone is that they will often double count conversions. If you show = retargeting ads on Google and Meta and LinkedIn for example, all three plat= forms will often take credit for the same conversion.

We like to use Cometly=E2= =80=A6 here is a screenshot of our actual SaasRise Cometly dashboard, showi= ng the results for our monthly ad spend across Meta, Google, Linkedin, Adro= ll, and Bing in real time.

=3D""

Our Cometly Dashboard<= /p>

Step Three: Start Your Ads Test

Once you=E2=80=99ve got= your tracking system in place, then turn on your ads with an initial test = budget=E2=80=A6 just enough to get a Cost Per Lead (CPL) per channel and ad= type.

Test= the following=E2=80=A6

  1. Retargeting ads - Meta, LinkedIn, Google Display, Adroll

    =

  2. Paid Search Ads - Google, Bing

  3. Matched audience ads - Meta, LinkedIn, Google Display, Adroll

  4. Lookalike/Predictive ads - Meta, LinkedIn, Googl= e Display

  5. Boosted post ads - LinkedIn (impress= ions goal within matched audience)

  6. <= p style=3D"padding:0px;text-align:left;word-break:break-word;"> Review site= ads - G2, Capterra, SoftwareAdvice, GetApp

P= ut in your weekly ad results into a spreadsheet like this (make = a copy) and start increasing your budget in the channels that are giving CP= Ls under your Target CPL. Increase your budgets slowly around 10-15% per we= ek.

If you= =E2=80=99re getting junk leads, check your geographic targeting to ensure o= nly your target countries are selected and make sure all the expansion opti= ons (Advantage+, Performance Max, etc.) are turned off.

  1. Testimonial Ads

  2. Product F= eature Ads

  3. Case Study Ads

  4. Founder Video Ads

  5. Blog Post Ads

  6. Free Trial / Demo Ads

You may want to subscr= ibe to a Design-as-a-service platform like Design Pickle or Superside to ge= t continual new ad creatives uploaded each month, leaving the best performe= rs and replacing poor performers with new creatives monthly.

You can use this template to determine your test budget.

3D""

See slide

Step Four= : Conversion Rate Optimize!

Conversion Ra= te Optimization is the pr= actice of optimizing each of the steps in the funnel by a little bit each m= onth, in order to achieve a big overall reduction in customer acquisition c= ost =E2=80=93 allowing you to then spend more, win ad auctions, and create = a virtuous cycle of growth and market dominance.=C2=A0

You=E2=80=99ll want to optimize each of the three major parts = of your funnel=E2=80=A6

=

    Ad CTR (optimize ad= s and audience targeting)

  1. Visitor to Lead Conversion (optimize landing page

  2. Lea= d to Customer Conversion (optimize sales process)

Small tweaks t= o each stage can make big differences!

3D""

See this slide

3D""

See this slide

3D""

Exampl= e from Clearstream

You can review our slides on conversion rate optimization= here and also watch our Loom video on CRO.

Step Five: Sc= ale Up The Channels That Works

Once you=E2=80=99ve completed 2-3 months of optimiz= ation on your audience targeting, ad creatives, offer, landing pages, marke= ting automation sequences, and sales process =E2=80=94 and know your CAC pe= r channel =E2=80=94 start scaling up ad spend on the channels that are prod= ucing the best results.

You can use a spreadsheet like the= se to assess your results by channel.

3D""

See our = Channel Scaling Template

If it doesn=E2=80=99t work right away,= keep at it. Getting ads to work profitable is the holy grail and the main = difference between a SaaS firm with $3M in ARR vs. $30M in ARR.

If you want help with = your paid ads, we have an a= ds agency for B2B SaaS firms and you can hire us.= Learn more here.

Key Slides

Here are some the most important slides from the video=E2=80=A6 =

3D""

See slide deck

3D""<= /td>

See slide deck

3D""

See slide deck

=3D""

See slide = deck

3D""

See slide deck

3D""

S= ee slide deck

=
3D""
=

See slide deck

 

Join Our Community of SaaS CEOs & Founders

We= =E2=80=99re now up to 397 members in SaasRise, representing over $2.5B in A= RR

3D""
Apply to Join SaasRise Here =F0=9F=94=A5
 

Thanks for reading! If you liked this articl= e, join the SaasRise community at www.saasrise.com for even more helpful growth content and weekly SaaS CEO masterminds.

About The Author

3D""

Ryan Allis is the founder of SaasRis= e, the mastermind community for growth-focused SaaS CEOs with= $1M-$100M in ARR. He is a three time INC 500 CEO. He was previously CEO of= iContact and grew the firm as founder/CEO to 70,000 customers, 1 million u= sers, 300 employees, $50M per year in sales, and an exit for $169M to Vocus= (NASDAQ:VOCS).

Since t= he sale of iContact, Ryan has been the CEO coach to high-growth SaaS firms = including Instantly, Tatango, Seamless.ai, Pipeline, Datalyse, Green Packet= , Revenue Accelerator, Galleon, Clearstream, YouCanBookMe, Retreaver, and E= ventMobi. Ryan has been part of the EO and Summit Series communities.

He holds an MBA from Harvard = Business School, where he was Co-President of the Social Enterprise Club an= d a member of the Harvard Graduate School Leadership Institute. He=E2=80=99= s passionate about helping recurring revenue software companies grow and ex= it.

We=E2=80=99ll see you next time with more= great SaaS growth and scaling content!

 

Update your email prefere= nces or unsubscribe here

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